Ladbrokes posts loss as increased taxation bites

Chief executive Jim Mullen has insisted that Ladbrokes is on the right track despite the UK bookmaker having generated its first negative result in a decade by posting a loss of £43.2 million (€55.4 million/$61.1 million) for 2015, down from a profit of £37.7 million in 2014.

Ladbrokes said that revenues rose by 2.1% to £1.2 billion over the course of the full year, with H2 results – in the period following the new strategy introduced by incoming CEO Mullen – actually up by 5% year-on-year.

However, tax increased by £50 million, and Ladbrokes also incurred a £99 million exceptional charge on the writedowns and merger costs. The figures reflected for the first time a new a 15% “point of consumption” tax on gross profits and included £19.8 million in merger costs related to its pending tie-up with rival Coral.

The company added that digital net revenue grew by 12.9%, with the Q4 figure up 31.4% “as marketing and product investment delivered strong growth in actives and staking”.

Mullen said: “I am pleased to be able to report a good start to the delivery of the strategy outlined in July. Although it remains early days there is positive progress to report.

“In UK retail, self-service betting terminals are delivering growth, football is up and our retail team are delivering strong multi-channel growth.

“The full-year figures reflect the costs needed to undertake significant investment to deliver the strategy as well as facing circa £50 million of increased taxation.”

Ladbrokes said that UK Retail net revenue was up 2% with growth of 6.5% in Q4.

Australian operations saw a 65% increase in activity and a 71% rise in net revenue.

Mullen said: “While it is pleasing to report that after two quarters we have made a good start, we are only at the beginning of the journey.

“Therefore, 2016 will see the same focus on winning more recreational customers, excellent operational delivery and a performance driven approach as the basis for delivering on our clear 2017 financial targets.”

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